A company reported net income of $200,000 during 2019.The company reported depreciation expense of $35,000,patent amortization of $10,000 and a $5,000 loss on the sale of equipment.Using the indirect method,how much is the company's net cash flow from operating activities?
A)$245,000.
B)$250,000.
C)$240,000.
D)$235,000.

Question

Quizplus · Accepted Answer

The net cash flow from operating activities is calculated by starting with the net income and adjusting for non-cash expenses and gains/losses on sales of assets. Here, add back the depreciation expense ($35,000), patent amortization ($10,000), and the loss on the sale of equipment ($5,000) to the net income ($200,000) to get $250,000.

A Company Reported Net Income of $200,000 During 2019